Understanding your financial metrics at a granular level is important in that it allows for a true understanding of what is happening, and what is not. It enables you to drill down and appreciate, for example, similarities, differences, and outliers. Being informed at a granular level enables better decision-making when it comes to determining how to increase profits. How often does one need to look at these metrics and how does one evaluate and react to numbers?
The frequency with which to look metrics depends upon the area of business. For example, inventory flows and manufacturing output should be looked at on a daily basis. Your sales pipeline, on the other hand, should be looked at on a weekly basis, and your financials should be looked at monthly.
Once a schedule has been established, the question is what to do with the data – how should the data be evaluated and when is it time to act? The reality is that there is no hard and fast answer to this question. When to act is dependent upon the type of business, its typical cycle, and the company itself. It is therefore important to develop a database that captures your metrics. This database should be updated with the same frequency that the data is collected (see above for suggested frequency). A historical database will enable you to quickly identify a data point that is deviating, positive or negative, from the historical. When this happens, it is time to act.
Fronetics Strategic Advisors is a leading management consulting firm. Our firm works with companies to identify and execute strategies for growth and value creation.
Whether it is a wholesale food distributor seeking guidance on how to define and execute corporate strategy; a telematics firm needing high quality content on a consistent basis; a real estate firm looking for a marketing partner; or a supply chain firm in need of interim management, our clients rely on Fronetics to help them navigate through critical junctures, meet their toughest challenges, and take advantage of opportunities. We deliver high-impact results.
We advise and work with companies on their most critical issues and opportunities: strategy, marketing, organization, talent acquisition, performance management, and M&A support.
We have deep expertise and a proven track record in a broad range of industries including: supply chain, real estate, software, and logistics.
